Retirement and loneliness

Sophie Guthmuller, Dörte Heger, Johannes Hollenbach and Anna Werbeck

No 1048, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: We investigate the short- and long-term effects of retirement on loneliness using panel data from the Survey of Health, Aging, and Retirement in Europe. To estimate causal effects, we exploit differences in retirement eligibility rules across and within countries and use retirement thresholds in an instrumental variable setting. On average, we find that entering retirement leads to a significant reduction in loneliness in the long run, although our results show no clear effect in the short run. The reduction is driven by individuals being less likely to feel socially isolated and lacking companionship. Our results suggest that individuals adapt to retirement by increasing their activity levels and reap the benefits in terms of reduced loneliness and social isolation. Heterogeneity analysis by gender reveals that retirement increases feelings of loneliness for women in the short term, and that this effect appears to be driven by women lacking companionship when their partner is not yet retired.

Keywords: Loneliness; social isolation; retirement; instrumental variable; causal effect (search for similar items in EconPapers)
JEL-codes: I10 J14 J26 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-age, nep-eur, nep-hea, nep-inv and nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:282008

DOI: 10.4419/96973217

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